An interesting comment from Nassim Taleb at today’s New Yorker Summit. He argues that even 1980s level of economy-wide debt are intolerable today, in part because of the Internet:
We have to be a lot more careful going forward, because we have globalization, the internet, and operational efficiency — which cannot accommodate debt.
I have been thinking a great deal about this, largely because of a writing project related to tightly-coupled systems, in Charles Perrow’s sense, and the consequences of disappearing slack. I’m assuming that is the point Nassim is making, in which case I mostly agree, although I’m not sure I would go all the way to his binary conclusion.
Nevertheless, it is a point well worth making: We live in a world with less slack than ever, whether you’re thinking in epidemiological or financial terms (and they are analogous), and that has immense consequences for runs, of whatever variety.